Question:
Refer to the financial statements and related disclosure notes of Dell Inc. in Appendix B located at the
back of the text.
Required:
1. What categories does the company use to classify its assets? Its liabilities?
2. Why are investments shown as a current asset?
3. Explain the current liability “deferred services revenue.”
4. What purpose do the disclosure notes serve?
5. What method does the company use to depreciate its property and equipment?
6. Does the company report any subsequent events or related party transactions in its disclosure notes?
Answer:
Requirement 1
The balance sheet includes seven asset classifications: Current assets; Property, plant, and equipment,
net; Investments; Long-term financing receivables, net; Goodwill; Purchased intangible assets, net; and
Other noncurrent assets; and four liability classifications: Current liabilities; Long-term debt; Long-term
deferred services revenue; and Other noncurrent liabilities.
Requirement 2
These assets are shown as current because the company intends to convert them to cash in the next year
or operating cycle.
Requirement 3
Deferred services revenue, sometimes called unearned revenue, represents cash received from customers
in advance of providing services.
Refer to the financial statements and related disclosure notes of Dell Inc. in Appendix B located at the
back of the text.
Required:
1. What categories does the company use to classify its assets? Its liabilities?
2. Why are investments shown as a current asset?
3. Explain the current liability “deferred services revenue.”
4. What purpose do the disclosure notes serve?
5. What method does the company use to depreciate its property and equipment?
6. Does the company report any subsequent events or related party transactions in its disclosure notes?
Answer:
Requirement 1
The balance sheet includes seven asset classifications: Current assets; Property, plant, and equipment,
net; Investments; Long-term financing receivables, net; Goodwill; Purchased intangible assets, net; and
Other noncurrent assets; and four liability classifications: Current liabilities; Long-term debt; Long-term
deferred services revenue; and Other noncurrent liabilities.
Requirement 2
These assets are shown as current because the company intends to convert them to cash in the next year
or operating cycle.
Requirement 3
Deferred services revenue, sometimes called unearned revenue, represents cash received from customers
in advance of providing services.
